II 

112TH CONGRESS 

1ST SESSION S. 884 

To amend the Internal Revenue Code of 1986 to provide for a variable 

VEETC rate based on the price of crude oil, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 4, 2011 

Mr. GRASSLEY (for himself, Mr. CONRAD, Mr. JOHANNS, Ms. KLOBUCHAR, 

Mr. FRANKEN, Mr. JOHNSON of South Dakota, Mr. HARKIN, and Mr. 

NELSON of Nebraska) introduced the following bill; which was read twice 

and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

for a variable VEETC rate based on the price of crude 

oil, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Domestic Energy Pro5 motion Act of 2011’’. 

6 SEC. 2. VARIABLE VEETC RATE BASED ON PRICE OF CRUDE 

7 OIL. 

8 (a) EXCISE TAX CREDIT.— 


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1 (1) IN GENERAL.—Subparagraph (A) of section 

2 6426(b)(2) of the Internal Revenue Code of 1986 is 

3 amended— 

4 (A) by striking ‘‘and’’ at the end of clause 

5 (i), 

6 (B) by inserting ‘‘and before 2012’’ after 

7 ‘‘2008’’ in clause (ii), 

8 (C) by striking the period at the end of 

9 clause (ii) and inserting ‘‘, and’’, and 

10 (D) by adding at the end the following new 

11 clauses: 

12 ‘‘(iii) in the case of calendar year 

13 2012, 20 cents, 

14 ‘‘(iv) in the case of calendar year 

15 2013, 15 cents, and 

16 ‘‘(v) in the case of calendar quarters 

17 beginning after 2013, the applicable rate 

18 determined in accordance with the fol19 lowing table: 

‘‘If the average price of crude oil The applicable rate for 

during the preceding calendar 

quarter is: 

the calendar quarter is: 

Not more than $50/barrel ............................................................ 30 cents

More than $50 but not more than $60/barrel ............................. 24 cents

More than $60 but not more than $70/barrel ............................. 18 cents

More than $70 but not more than $80/barrel ............................. 12 cents

More than $80 but not more than $90/barrel ............................. 6 cents

More than $90/barrel ................................................................... 0 cents. 

20 For purposes of the preceding table, the 

21 average price of crude oil for any calendar 


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1 quarter shall be the average 3-month fu2 tures price on the New York Mercantile 

3 Exchange for light sweet crude oil for such 

4 calendar quarter.’’. 

5 (2) EXTENSION OF TAX CREDIT OR PAY6 MENT.—Sections 6426(b)(6) and 6427(e)(6)(A) of 

7 such Code are each amended by striking ‘‘2011’’ and 

8 inserting ‘‘2016’’. 

9 (b) INCOME TAX CREDIT.— 

10 (1) IN GENERAL.—The table contained in sec11 tion 40(h)(2) of the Internal Revenue Code of 1986 

12 is amended— 

13 (A) by striking ‘‘calendar year’’ in the 

14 heading for the first column, 

15 (B) by inserting ‘‘Calendar year’’ before 

16 ‘‘2001’’, 

17 (C) by inserting ‘‘Calendar year’’ before 

18 ‘‘2003’’, 

19 (D) by inserting ‘‘Calendar year’’ before 

20 ‘‘2005’’, 

21 (E) by inserting ‘‘Calendar years’’ before 

22 ‘‘2009’’, 

23 (F) by striking the period at the end of the 

24 table, and 

25 (G) by adding at the end the following: 


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‘‘Calendar year 2012 ................ 20 cents 14.8 cents 

Calendar year 2013 .................. 15 cents 11.1 cents 

Any calendar quarter beginning 

after 2013 and before 2017.

1st 

applicable 

rate 

2d applicable rate.’’. 

1 (2) APPLICABLE RATES.—Paragraph (3) of sec2 tion 40(h) of such Code is amended to read as fol3 lows: 

4 ‘‘(3) APPLICABLE RATES.—For purposes of this 

5 subsection, the 1st applicable rate and the 2d appli6 cable rate shall be determined in accordance with 

7 the following table: 

‘‘If the average price of crude 

oil during the preceding calendar quarter is: 

The 1st applicable 

rate for the calendar quarter is: 

The 2d applicable rate 

for the calendar quarter 

is: 

Not more than $50/barrel ....... 30 cents 22.20 cents 

More than $50 but not more 

than $60/barrel.

24 cents 17.76 cents 

More than $60 but not more 

than $70/barrel.

18 cents 13.33 cents 

More than $70 but not more 

than $80/barrel.

12 cents 8.88 cents 

More than $80 but not more 

than $90/barrel.

6 cents 4.44 cents 

More than $90/barrel ............... 0 cents 0 cents. 

8 For purposes of the preceding table, the average 

9 price of crude oil for any calendar quarter shall be 

10 the average 3-month futures price on the New York 

11 Mercantile Exchange for light sweet crude oil for 

12 such calendar quarter.’’. 

13 (3) EXTENSION OF TAX CREDIT.—Section 40 of 

14 such Code is amended— 

15 (A) by striking ‘‘2011’’ in subsection 

16 (e)(1)(A) and inserting ‘‘2016’’, 


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1 (B) by striking ‘‘2012’’ in subsection 

2 (e)(1)(B) and inserting ‘‘2017’’, and 

3 (C) by striking ‘‘2011’’ in subsection 

4 (h)(1) and inserting ‘‘2016’’. 

5 (c) REPEAL OF DEADWOOD.—Section 6426(b)(2) of 

6 the Internal Revenue Code of 1986 is amended by striking 

7 subparagraph (C). 

8 (d) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to any sale, use, or removal for 

10 any period after the date of the enactment of the Act. 

11 SEC. 3. EXTENSION OF CELLULOSIC BIOFUEL PRODUCER 

12 CREDIT THROUGH 2016. 

13 (a) IN GENERAL.—Section 40(b)(6) of the Internal 

14 Revenue Code of 1986 is amended by striking subpara15 graph (H). 

16 (b) CONFORMING AMENDMENT.—Section 40(e) of 

17 the Internal Revenue Code of 1986 is amended by striking 

18 paragraph (3). 

19 SEC. 4. EXTENSION AND MODIFICATION OF ALTERNATIVE 

20 FUEL VEHICLE REFUELING PROPERTY CRED21 IT. 

22 (a) EXTENSION FOR ETHANOL REFUELING PROP23 ERTY.—Subsection (g) of section 30C of the Internal Rev24 enue Code of 1986 is amended— 


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1 (1) by striking ‘‘and’’ at the end of paragraph 

2 (1), 

3 (2) by striking the second period at the end of 

4 paragraph (2), 

5 (3) by redesignating paragraph (2) as para6 graph (3), and 

7 (4) by inserting after paragraph (1) the fol8 lowing new paragraph: 

9 ‘‘(2) in the case of property relating to fuel de10 scribed in subsection (c)(2)(A)(ii), after December 

11 31, 2016, and’’. 

12 (b) ONLY CERTAIN ETHANOL BLENDS ELIGIBLE

13 FOR CREDIT.—Subparagraph (A) of section 30C(c)(2) of 

14 the Internal Revenue Code of 1986 is amended to read 

15 as follows: 

16 ‘‘(A) Any fuel— 

17 ‘‘(i) at least 85 percent of the volume 

18 of which consists of one or more of the fol19 lowing: natural gas, compressed natural 

20 gas, liquified natural gas, liquefied petro21 leum gas, or hydrogen, or 

22 ‘‘(ii) at least 85 percent of the volume 

23 of which consists of— 

24 ‘‘(I) ethanol, or 


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1 ‘‘(II) ethanol and one or more of 

2 the fuels described in clause (i), but 

3 only if at least 20 percent and not 

4 more than 85 percent of the volume of 

5 such fuel consists of ethanol.’’. 

6 (c) CREDIT FOR DUAL-USE REFUELING PROP7 ERTY.—Subsection (e) of section 30C of the Internal Rev8 enue Code of 1986 is amended by adding at the end the 

9 following new paragraph: 

10 ‘‘(6) DUAL-USE REFUELING PROPERTY.— 

11 ‘‘(A) IN GENERAL.—In the case of any 

12 dual-use refueling property, 100 percent of the 

13 cost of such property shall be treated as quali14 fied alternative fuel refueling property if the 

15 taxpayer certifies, in such time and manner as 

16 the Secretary shall prescribe, that such prop17 erty will be used in more than a de minimis ca18 pacity for the purposes described in section 

19 179A(d)(3)(A) (applied as specified in sub20 section (c)(2)). 

21 ‘‘(B) RECAPTURE.—If at any time within 

22 5 years after the date of the certification under 

23 subparagraph (A) the dual-use refueling prop24 erty ceases to be used as required under such 

25 subparagraph, 100 percent of the cost of such 


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1 property shall be subject to recapture under 

2 paragraph (5). 

3 ‘‘(C) DUAL-USE REFUELING PROPERTY.— 

4 For purposes of this paragraph, the term ‘dual5 use refueling property’ means property that is 

6 both qualified alternative fuel vehicle refueling 

7 property and property used— 

8 ‘‘(i) to store or dispense fuels not de9 scribed in subsection (c)(2), or 

10 ‘‘(ii) to store fuels described in sub11 section (c)(2) for any purpose other than 

12 delivery of such fuel into the fuel tank of 

13 a motor vehicle.’’. 

14 (d) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to property placed in service after 

16 December 31, 2011. 

17 SEC. 5. EXTENSION OF SPECIAL DEPRECIATION ALLOW18 ANCE FOR CELLULOSIC BIOFUEL PLANT 

19 PROPERTY. 

20 Subparagraph (D) of section 168(l)(2) of the Internal 

21 Revenue Code of 1986 is amended by striking ‘‘January 

22 1, 2013’’ and inserting ‘‘January 1, 2017’’. 

23 SEC. 6. STAGED REDUCTION OF ETHANOL TARIFF. 

24 (a) CALENDAR YEAR 2012.— 


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1 (1) IN GENERAL.—Heading 9901.00.50 of the 

2 Harmonized Tariff Schedule of the United States is 

3 amended— 

4 (A) by striking ‘‘14.27¢’’ and inserting 

5 ‘‘5.28¢’’ in the column 1 general rate of duty 

6 and in the column 2 rate of duty; and 

7 (B) by striking ‘‘Before 1/1/2012’’ and in8 serting ‘‘Before 1/1/2013’’. 

9 (2) EFFECTIVE DATE.—The amendments made 

10 by paragraph (1) shall take effect on January 1, 

11 2012. 

12 (b) CALENDAR YEARS 2013 THROUGH 2016.— 

13 (1) IN GENERAL.—Heading 9901.00.50 of the 

14 Harmonized Tariff Schedule of the United States is 

15 amended— 

16 (A) by striking ‘‘5.28¢’’ and inserting 

17 ‘‘3.96¢’’ in the column 1 general rate of duty 

18 and in the column 2 rate of duty; and 

19 (B) by striking ‘‘Before 1/1/2013’’ and in20 serting ‘‘Before 1/1/2017’’. 

21 (2) EFFECTIVE DATE.—The amendments made 

22 by paragraph (1) shall take effect on January 1, 

23 2013. 

Æ 


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